Topics

McDonald Outlines P&G Success Formula: Improving Lives Through Innovation

Tuesday, October 11, 2011 10:14 am EDT

Saying Procter and Gamble’s unrelenting focus on innovation is “at the heart of everything we do,” P&G Chairman, President and Chief Executive Officer Bob McDonald recently talked about the company’s keys to success during fiscal year 2011 in spite of the tough global economic conditions. The remarks came during the company’s annual Shareholder’s Meeting in Cincinnati.

“Innovation is the primary way we fulfill our Purpose,” he said. “It’s the driving force behind our strategy, as it always has been at P&G. Our experience has proven that promotions may win a quarter here and there, but innovation wins decades.”

As he addressed the shareholders in attendance, Bob said the company entered Fiscal 2011 with three clear objectives: 

  • Execute the company’s purpose-inspired growth strategy;
  • Grow market share by growing organic sales one to two percentage points ahead of underlying market growth rates; and
  • Grow core earnings per share in the range of 7% to 9%.

 

And, in spite of significant business and economic challenges, Bob said the company managed to meet or exceed goals for each of the objectives. 

“We’re touching and improving the lives of more consumers in more parts of the world more completely,” he told the crowd. “We’re innovating up and down value tiers. We’re expanding into geographic whitespace, especially in emerging markets. And we’re entering adjacent categories and filling out regimen portfolios to meet the fullest range of consumer needs.”

At the same time, Bob reported that FY 2011 organic sales growth* was up 4%, generally ahead of competition, and said the company held or grew market share in categories representing about 60% of its business, in four of five regions, in 11 of P&G’s top 17 countries, and on 17 of the company’s 24 billion-dollar brands.

Looking forward, Bob outlined the company’s four key priorities for Fiscal year 2012:

1. Continue sales growth momentum;

2. Execute price increases with excellence;

3. Deliver quality earnings growth driven by operating income; and

4. Improve productivity in all aspects of the company.

McDonald said innovation was the key thread running through all of the priorities and cited several examples of innovative products or approaches, including Crest 3D White, Gillette Guard, Head and Shoulders and Old Spice.

“I don’t know of a company that has delivered sustainable top and bottom line growth over time that has not also been the innovation leader of its industry,” he told the crowd. “Innovation and portfolio expansion remain critical growth drivers and are central to fulfilling the company’s Purpose of touching and improving the lives of the world’s consumers.  We currently have one of the strongest innovation and global expansion programs in P&G history.  And, we have a strong pipeline going forward.”

McDonald also acknowledged the challenges facing the company.

“We’re operating in a very tough economic environment with high degrees of uncertainty, but we’ve been through tough periods before, and we have always stayed focused on what must be done in the present while not losing sight of what it will take to keep growing in the future,” he said. “We’re maintaining that focus today. We’re not the kind of company that chases short term commodity or currency movements at the expense of our strategy, and we’re confident our strategy is right now and for the long term.”

Additional Information:

 

*See Exhibit 1: Non-GAAP Measures in press release issued today

Multimedia

Preview Image: 
Preview image